A Senate inquiry into public interest journalism has turned into an examination of the Fairfax Media executive Greg Hywood’s multimillion-dollar package at a time when the company was sacking a quarter of its journalists.

After the chief executive stonewalled a series of questions about exactly what he earned last year, Senator Kimberley Kitching asked him if he was “the Marie Antoinette of Fairfax”.

There was even a reference to the former journalist’s $140,000 luxury car, and a question about whether he was “driving Fairfax off the cliff” in the blue Maserati Ghibli.

But he repeatedly refused to confirm the figure, saying variously it was “media speculation”, he couldn’t remember exactly how much it was and it was irrelevant to the inquiry at hand.

Hywood said his bonuses were not “directly” based on laying off journalists but were mainly paid because his leadership had made Domain more profitable for shareholders.

It was “very unfortunate” the company had to lay off many more than just 125 journalists, he said, but it had to downsize its workforce if it was to continue to produce quality journalism on a mass scale.

“Frankly, I thought we were here to talk about the future of journalism and I’ve made the point too that if Fairfax like every other media company is to do what it needs to do, all people in the organisation should be paid market rates,” Hywood said.

“This is an inquiry about the future of journalism, not remuneration for executives of ASX-listed companies.”

Senator Lisa Singh asked if Fairfax senior management would be prepared to take a 25% pay cut, as has been suggested by editorial staff.

“We pride ourselves on providing above-market salaries,” Hywood said. “We need good people to work at this business. You don’t fix the issues confronting the media business by doing the same thing again and again, and expecting a different result ... You have to think your way through these issues.”

Under attack himself, Hywood turned to targeting the ABC for its attempts to ensure the public was accessing its digital content.

He accused the ABC of stealing Fairfax traffic by “aggressively expanding” from television and radio into digital news and then paying Google “taxpayers’ money” to put ABC websites at the top of the search engine.

“Current media regulations designed for a legacy market prevent local media effectively competing for scale with international players such as Facebook and Google,” Hywood said, adding that Google paid negligible tax and spent nothing on content provision.

“The ABC is creating additional pressure on commercial media by aggressively competing for the same audience that commercial media rely on by providing online content for free, undermining our ability to create a sustainable model.”

But Hywood stopped short of asking for a government handout, saying he didn’t want to be obligated to government as the ABC was.

“It has never been our belief that commercial enterprise should be supported by government, however we do believe in a regulatory environment that provides a level playing field which allows local media to take the necessary steps to compete with Google and Facebook.”

Earlier the inquiry heard from the Media, Entertainment and Arts Alliance chief executive, Paul Murphy, who said more than 2,500 editorial jobs had been cut from media organisations in Australia since 2011.

When Murphy said he had not met with Hywood about the cull of 125 jobs, Dastyari engineered an off-the-record chat between the two men during morning tea.